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Tadawul-listed local lender Al Rajhi Bank has secured a USD 1.92 bn Shariah-compliant sustainability-linked syndicated loan, Bloomberg reports, citing a source familiar with the matter. The three-year facility, said to be the largest of its kind in the MENA region so far this year, is split into a USD 1.2 bn tranche, and a USD 705 mn tranche set to be used for the bank’s general corporate purposes.
Who’s in on the loan: The local lender is reportedly receiving the funding from a syndicate of over 20 regional and international banks, including our friends at HSBC Holdings, Emirates NBD, and Maybank Investment.
Al Rajhi has been on a financing roll: The leading Saudi bank raised USD 1 bn in additional tier 1 sustainable sukuk earlier in May, in a transaction that booked some USD 3.5 bn in orders from local and foreign investors. Al Rajhi tapped international debt markets for the first time this year in March, after it closed another USD 1 bn from its five-year USD-denominated sustainable sukuk offering with orders topping USD 2.8 bn.
IN CONTEXT- The financing agreement comes at a time when the Kingdom is grappling with a liquidity crunch, as loan growth outpaces deposits to support economic growth. Bloomberg Intelligence estimates that local banks may need to issue around USD 10-15 bn in debt per year through to 2028 to support the government’s investment push.
